America Next Energy Plan - Organizing Around Abundance

8/11/2019 America Next Energy Plan - Organizing Around Abundance

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ofC

Executive Summary ............................................................................................ 3

Te Problem with Americas Energy Policy: We Dont Have One...................... 7

Principle #1: Promote Responsible Development of Domestic Energy

Resources and Construction of Infrastructure to ransport It ...................... 14

Oil and Natural Gas ..........................................................................................14Keystone XL PipelineBuild It Now ............................................................14

Property Rights, Federal Lands, and Resource Development ........ ............15

Te Benefits o Increased Natural Gas Production ............ ............. ............17

Home Heating Oil ........ ............. ............ ............. ............ ............. ............ ........18

Coal .....................................................................................................................20

Nuclear ...............................................................................................................22

Principle #2: Encourage echnolocigal Innovation of Renewables

and Emerging Energy Resources ...................................................................... 25

Principle #3: Unlock the Economic Potential of the Manufacturing

Renaissance by Putting Americas Energy Resources to Work ....................... 30

Principle #4: Eliminate Burdensome Regulations ........................................... 34

Principle #5: Bolster National Security ............................................................ 37

Principle #6: ake Simple, angible Steps to Address the Possible Risks

of Climate Change, in Concert with Other Major Economies ........................ 40

Conclusion: American EnergyTe Ultimate Resource ................................ 43

Endnotes ........................................................................................................... 44


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A E G O

American energy resources and energytechnologies are the envy o the world.1We have more oil, natural gas, and coalresources combined than any other nation

in the world. Our technological innovations onnewer and alternative sources o energy rom wind,to solar, to biouels are the most advanced in theworld. Tese are not wild eyed theories, these are theacts.

America is poised or a golden age o energyan erao energy abundance, low prices, and environmentalstewardship that can be the envy o the world.

Energy has already created millions o jobsor the American economy. Consultants atPriceWaterhouseCoopers (PwC) report that theoil and gas industry supports over 10 million jobsacross the economy.2 Another study ound that

unconventional oil and gasi.e., the hydraulicracturing revolutionsupported 2.1 million jobs in2012.3 But smart energy policy can also turbochargeour existing economic resources to give America anera o significant job and manuacturing growth.

Affordable energy gives American businesses andentrepreneurs a built-in advantage compared totheir peers overseas. Companies have made majorinvestments in plants and equipment in the UnitedStatesbecause the hydraulic racturing revolutionand other innovations have made energy more

affordable or businesses located on our shores.With the right policies that promote abundant andaffordable energy, millions o Americans can and willbenefit rom new, quality, high-paying jobs.

I we jettison the Obama Administrations lef-wingapproach, and ollow the smart energy path, thenew projects created over the past several years

could represent a mere prelude to a ull-scale energyand manuacturing jobs boom. PwC reports newnatural gas production opportunities could add 1million manuacturing jobs to the U.S. economy by2025.4 Other studies confirm this finding, notingthe hundreds o thousands o new potential jobsin chemical and other industries. Overall, thenumber o jobsdirect and indirectcreated byunconventional oil and gas could nearly double overthe next decade.5

Now or the tragic part, none o this is inevitable.Without a smart and aggressive energy plan, we willail to seize this opportunity. In act, we are on theroad to ailure right now.

A CE R

Despite our incredible potential, today Americasuffers under a government-created energy crisis.Electricity and gasoline prices have risen, and show

no signs o easing due to current ederal policies.Tousands o unemployed Americans who couldbe working in good paying jobs remain joblessbecause o wrongheaded polices rom Washington.We must discard the ailed policies o the ObamaAdministration and embrace our energy blessings.

Te Obama Administration policies are based onradical lefist ideology which is causing America tosnatch deeat rom the jaws o victory. Te ObamaAdministration would like Americans to believe inthe inevitability o energy scarcity and ever-rising

energy pricesthe same ailed mindset o theJimmy Carter Administration. Energy scarcity andskyrocketing energy prices result rom ailed publicpolicy, not our unparalleled energy abundance.

Hostile nations around the world, sitting on ewerenergy resources than the United States, celebratehigh energy prices and take advantage o these high

E S


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prices to make their nations rich. Under the ObamaAdministration, America neither does everything wecan to increase energy production to take advantageo high energy prices nor actively works to bring suchprices down. o the contrary, excessive restrictionson American power plants, refineries, and other

American energy businesses make our mountingenergy problems even worse.

At the same time, the Obama Administration reusesto build the Keystone XL pipeline, brags aboutbankrupting entire industries, and touts their desireto see consumers pay higher prices. Meanwhile, theypick winners and losers, and they seem to specializein losers, wasting our tax dollars on lef-wingantasies such as Solyndra.

When it comes to energy policies, the ObamaAdministration is ull o "energy deniers" whopursue radical environmental ideology that flies inthe ace o the science and the acts, and they do sowith religious ervor.

A EF R

We have a choice to make.

Embrace our resources and technologicalabilities and usher in an unprecedented erao energy independence and job growth.

OR

Stay the course of the ObamaAdministrations radical Lef policies andwatch these opportunities or job growth,lower prices, and energy independence slipthrough our grasp.

A truly effective American energy policy willrecognize that abundant energy resources are ablessing, not a curse. We must strive orandachievestrong environmental stewardship whilereaping the benefits o our energy blessings. We mustfinally have the courage to pursue our bright energyuture without resigning ourselves to sel-ulfillingprophecies o energy scarcity and environmental ruin.

P : PR D D ER C I I

Affordable energy is one o the most importantprerequisites o a strong economy. America hasmore oil, natural gas, and coal than any other nationin the world.6 Punishing conventional energyproduction and conventional energy utilization willunnecessarily punish the American economy until

the day comes when alternative energy sourcessuch as wind and solar power become similarlydependable and affordable.

Te Obama Administration continues to limit oiland natural gas production on ederal lands evenas new technologies are enabling game-changingproduction increases on state and private lands.Our ederal government should take a leadershiprole in our energy renaissance, not serve as a balland chain weighing it down. We must make more

o our energy-rich ederal lands available or energyproduction.

America must also take better advantage o on-demand, zero-emissions nuclear power. Nuclearpower supplies one fifh o Americas electricity,yet the ederal government is suffocating nuclearpower under unnecessary red tape.7 Nuclearpower provides zero-emissions power much moreaffordably and reliably than renewable energyalternatives. Our ederal government should workto acilitate nuclear power production rather than

suppress it.

In addition to encouraging domestic production,America must welcome energy resources romriendly nations, particularly those in NorthAmerica. Afer more than five years o stalling anddelays, the time has come to approve and build theKeystone XL pipeline, which would create Americanjobs while bolstering American energy supplies.


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P : EI R E ER

Renewable energy offers substantial promise as anenvironmentally riendly energy source. Wind andsolar power are rapidly gaining market share andsupporting home-grown jobs. We can encouragecontinued growth or renewable energy by workingto solve intermittency and transmission challengesthat currently place restrictions on renewable energyutilization. Hydropower, an ofen-overlookedorm o renewable energy, can also comprise an

important piece o Americas energy portolio. Atthe same time, all energy sources should competeon a level playing field and the ederal governmentshould avoid picking winners and losers.

P : U E P MR P

A ER W

Domestic energy production does more thanreduce scarcity and prices; it creates and supportsmillions o American jobs. Importantly, the jobscreated in the energy industry are high-paying

jobs that lif people out o poverty and intoprosperity. Many o these jobs are available toyoung adults with appropriate technical training,providing unique opportunities or Americas

newest generation to share and improve upon theAmerican dream.

With suppressed energy production andunnecessarily high energy prices, Americasmanuacturing sector suffers competitivedisadvantages versus manuacturers in othercountries. Economists agree that Americas

manuacturing sector is poised or a surge inprosperity and high-paying job creation once ourederal government begins embracing rather thansuppressing new energy production techniquesand recent energy discoveries. Abundant,affordable energy is needed or America to

regain its proper place at the oreront o globalmanuacturing.

P : EB R

Energy may be the lieblood o the economy, butexcessive regulation is clogging our economysarteries. For example, the Obama Administrationhas just upped the ante on unjustified energy

regulations with excessive carbon dioxiderestrictions on Americas power plants. Ratherthan utilizing Americas abundant coal resourcesby working to develop cleaner coal technologies,the Administration has instead promulgated rulestargeting the coal industry that could cost 500,000

jobs by 2030, raising electricity prices by 20%.8 osecure a bright economic uture, we must put anend to such regulatory overreach.

o protect American jobs, EPA should be orcedto justiy its actions under a cost-benefit basis. We

must also put an end to EPA abusing its authorityand restore EPAs role o carrying out Congresswill rather than supplanting it. Similarly, EPAmust no longer be allowed to collude with activistgroups in sue-and-settle decrees that take placebehind closed doors.

P : BN S

American energy production, or lack thereo, playsa crucial role in our national security. Americashould not put policies in place that ban exportingour natural resources. While the best policies willencourage the use o abundant oil and natural gashere so that we can produce goods competitive ina global marketplace, we should not close the doorto exporting the resource when it makes economicsense.


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American energy production is ever moreimportant or our longer-term national security.Stale and ailed policies are all that are keepingus rom realizing North American energy sel-sufficiency. It is time to shed our dependency onoil imports rom hostile nations and reduce our

vulnerability to international political instability.Our energy plan will jettison such dependencyand vulnerability while leading America into abright, abundant, and more sel-sufficient NorthAmerican energy uture. American nationalsecurity requires a strong national economy, anda strong national economy requires abundant,affordable energy.

P : S

S A P R CC, C M E

Te best way to address climate change concernsis to work in cooperation with domesticmanuacturers, conservationists, Congress, andother stakeholders to develop smart policiesthat protect the environment and American jobs.

When America imposes unilateral restrictionson itsel and does not secure commitments romother nations to do the same, we impose unilateraldisadvantages on our economy while ailing tomake a meaningul impact on the global climate.

Our ederal government should ocus on agenda-ree climate research to best understand whatmay or may not take place regarding utureclimate changes. We must also work to developstrategies to adapt to and mitigate whatever

climate changes may occur. Te climate changeissue is too important or the ederal governmentto play political games and engage in demeaningname-calling and grandstanding. While we

pursue scientific answers to many climate changequestions, we should pursue no regrets policiesthat reduce carbon dioxide emissions withoutpunishing the American economy.Following these basic principles will lead to

changes that generate energy abundanceandstronger economic growthor the UnitedStates or decades to come. Tis vision o energyabundance represents a way orward ar betterthan the Obama Administrations obsession withenergy scarcityand a policy long overdue.

Governor Bobby JindalHonorary Chairman

1. Congressional Research Service, U.S. Fossil Fuel Resources:erminology, Reporting, and Summary, G. Whitneyet al., CRS Report R40872, November 30, 2010, http://www.epw.senate.gov/public/index.cm?FuseAction=Files.View&FileStore_id=04212e22-c1b3-412-b0ba-0da5eaead952.

2. PricewaterhouseCoopers, Economic Impacts o the Oiland Gas Industry on the US Economy 2011, July 2013, p.

15, http://www.api.org/~/media/Files/Policy/JobsEconomic_Impacts_ONG_2011.pd.

3. IHS, Americas New Energy Future: Te UnconventionalOil and Gas Revolution and the U.S. Economy, September1, 2013, p. 1, http://www.ihs.com/images/Americas-NewEnergy-Future-Mg-Renaissance-Main-Report-Sept13.pd.

4. PricewaterhouseCoopers, Shale Gas: A renaissance inUS manuacturing? December 2011, http://www.pwccom/en_US/us/industrial-products/assets/pwc-shale-gasus-manuacturing-renaissance.pd.

5. Americas New Energy Future, ibid.6. Congressional Research Service, U.S. Fossil Fuel Resources.7. U.S. Energy Inormation Administration, What is U.S.

electricity generation by energy source? June 13, 2014,

http://www.eia.gov/tools/aqs/aq.cm?id=427&t=3.8. Nicholas Loris, et al., Obamas War on Coal Hits American

Families Hard, Heritage Foundation, June 24, 2013, http://blog.heritage.org/2013/06/24/obamas-war-on-coal-hits-american-amilies-hard/.

PO B | A, VA

www.AmericaNext.org

Congressman Bill FloresCo-Author


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Access to affordable energy impacts every aspecto our nation and our amilies it is the lieblood

o our economic security, and ultimately ournational security. Americas energy resourcesare the envy o the world. Our nations combinedresources o oil, natural gas, and coal exceedthose o every other nation on Earth.1And theseenergy resources, i ully maximized, could helpcreate millions o high-quality American jobs.Nevertheless, over many years, Congresses, andadministrations, we have enacted a shortsightedpatchwork o reactive laws, regulations, andexecutive orders only dealing with immediateenergy issues. We can and must do better.

For too long, our ederal government haspursued energy policies that restrict and stifleenergy production rather than encourageit. Te Obama Administration has taken thisanti-energy sentiment to new extremes withrecently announced restrictions on power plantcarbon dioxide emissions. As President Obamapromised while on the 2008 campaign trail, hiscarbon dioxide restrictions and anti-conventionalenergy agenda would cause electricity pricesto necessarily skyrocket.2Te Administrationsailure to utilize all our energy resources has keptenergy prices higher than they need to bewhile

its proposed regulations will raise uture energyprices significantly. And without secure, affordableenergy, industries nationwide, rom manuacturingto tourism, suffer.

Costs to consumers appear to be completelyirrelevant to the people currently running ourederal government. President Obama has been inoffice or nearly six years, during which time the

average price o a gallon o gas at your local stationhas nearly doubled. Government policy has

proound implications or every American.

o the extent that the Obama Administration doeshave an energy policy, it can be described this way:

Make energy cost more for consumers sothey will use less o it;

Over-regulate forms of energy the radicalLef opposesspecifically ossil uelsinhopes o bankrupting the industries thatproduce them;

Use tax dollars to fund unproven and

untested projects avored by the radicalLef; and

Ignore facts based on science andeconomic data in avor o idealisticandunrealisticlef-wing ideology.

Te Obama Administration, which is synonymouswith lef-wing radical environmentalists, wantsAmericans to believe that we cannot lead the worldin energy production and at the same time be goodstewards o our planet. We reject this premise.

HE VISION: MAKING AMERICA AN

ENERGY SUPERPOWEROur vast energy resources should make useconomically prosperousa global leader not

just in energy production, but in manuacturingas well. An intelligent 21st century energy policymust translate Americas energy abundance intoenergy production and economic prosperity. Wecan achieve these goals while ensuring we protectour environmentwe can do both. Americasenvironmental protections are the most stringent

in the world, and enhanced energy production canoccur within those environmental protections.

America can become the global energy leader. Ournation has the natural resources, refining capacity,manuacturing know-how, and entrepreneurswith the drive to develop innovative, cutting-edgetechnology to do it. But to do so, we have to cutthrough red tape and bureaucracy, and unleash

P W AE P: W D H O

President Obama has been in

office for nearly six years, duringwhich time the average price of a

gallon of gas at your local station

has nearly doubled.


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the creative spirits o Americas entrepreneurs,engineers, and workorce.

We believe America benefits rom more abundantenergy production and affordable energy prices. Aorward-thinking American energy policy must

encourage affordable, abundant energy, and lay theoundation or technological innovation. Our planlooks to accomplish these goals and to do so withsound environmental stewardship.

Te opportunity or economic growth throughenergy abundance is here. We can seize it, but wemust understand that it is NO inevitable that itwill materialize. I we continue on our currentpaththe path designed by those who want usto shrink our energy production, increase energy

costs, and stifle economic prosperitywe canand will miss this opportunity. Te price or notseizing the opportunity will be staggering. Testakes are high.

Te report that ollows surveys the Americanenergy landscape today, and offers our visionor America as an energyand economicsuperpower.

HE OPPORUNIY: AMERICAN ENERGYCREAING AMERICAN JOBS

Being an energy leader creates more economicbenefits than simply affordable prices at the pumpor low heating bills. Affordable, abundant, secure,domestic energy promotes American job creationthe cornerstone o our nations economicprosperity. According to a study conducted byPricewaterhouseCoopers (PwC), the oil and gasindustry supports nearly 10 million jobs acrossthe economy.3Even more importantly, affordable,secure energy gives American consumers andbusinesses enormous indirect benefits, creatingand sustaining millions o jobs across theeconomic spectrum.

According to a recent report by IHS-CERA,arguably Americas most-respected energyconsultancy, in 2012 unconventional oil and gasproduction saved American households an averageo $1,200with a significant amount o thisattributed to the hydraulic racturing boom. By

2025, these real, i.e., inflation-adjusted, benefitswill skyrocket to more than $3,500 per yearasignificant savings or American amilies.4Tesame study ound that unconventional oil andgas development will support, either directly orindirectly, almost 3.9 million jobs by 2025a

near-doubling o the 2.1 million jobs supported in2012.5

Te savings rom the racking boom represent bothlower direct costs or energy and lower costs orenergy-intensive goods and services, which cannow be offered more cheaply. Given that the U.S.median household income in 2012 was just over$51,000, the 2025 number represents a 7% increasein income.6 And this income increase is even moredramatic or lower income Americans, who aredisproportionately affected by higher energy costs,and must spend a greater portion o their incomeson energy.

INCREASED ENERGY PRODUCIONMEANS MORE ENERGY JOBSEnergy production creates and sustains millions oAmerican jobs. Te benefits o increasing energyproduction extend throughout the entire economyand to every American household. Data romthe U.S. Energy Inormation Administration7andthe U.S. Bureau o Labor Statistics8illustrate thispoint. As Figure 1 below shows, when oil pricesrise, higher unemployment rates soon ollow. Morethan any other individual long-term actorbeit tech bubbles, housing bubbles, or Wall Streetbank crisesenergy prices drive our long-termeconomic prosperity or lack thereo.

Affordable, stable energy prices mean more moneyin peoples pockets, allowing Americans access tobetter housing, nutrition, education, health care,environmental protections, and other consumer

According to a study conducted

by PricewaterhouseCoopers

(PwC), the oil and gas industrysupports over 10 million jobs

across the economy.


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goods and services. Tis in turn stimulateslocal economies across the nation, creating

additional jobs throughout the economy. Fromcaterers and hotels that benefit rom increasedtravel and tourism, to tug boat owners whosebusiness increases rom higher shipping traffic, toequipment manuacturers and hardware storesselling more supplies, abundant, affordable energycan drive prosperity, job creation, and a risingstandard o living across myriad sectors o theAmerican economy.

And when we talk about jobs created by affordableenergy, we dont mean just energy jobs or the

green jobs so beloved by the Lef. While wewelcome and encourage the growth in jobs inemerging energy technologies and services, weunderstand that a truly sustainable job is onethat does not rely on taxpayer subsidies to besustainable. I higher priced orms o energy makeup too large a part o our portoliomore than is

justified by a financial need or predictability ocost and diversity o supplyit can be a job killer,not a job creator.

Te impact o jobs rom affordable energy reachesar beyond the energy sector. At a time when mucho the Lef remains ocused on income inequalityand the potential lack o upward mobility, thehigh-quality, well-paying jobs that Americasenergy abundance can create would do much tobolster a middle class beaten down by six yearso economic stagnation under President Obamasailed leadership. Consider what CNNMoney

reported about the value o manuacturing andenergy production jobs, which provide workers

just out o high school with a path to high wagesand real opportunity to live the American dream:

An aspiring machinista popular actory

jobcan start training at 18 and then do aone- or two-year manuacturingapprenticeship. In five years, he or she couldbe making more than $50,000. In 10 years,that could double to $100,000. Not a badsalary or a 28-year-old.9

Six-figure wages come even quicker or workerson oil rigs and natural gas fields. Workers inNorth Dakotas racking fields earn an average o$112,000 per year, the Fiscal imes reports.10

Te quality jobs that affordable energy willgenerate can help overcome the economicstagnation that stands as President Obamasoremost legacy. In October 2013, the labor orceparticipation rate ell to its lowest level since 1978and has remained anemic ever since.11However,the projected 1.7 million jobs that unconventionaloil and gas could create over the next decadecould help to draw more discouraged Americansback into the workorce. Tanks to the jobs thatabundant energy can create, Americas uture need

not resemble a permanent era o Jimmy Carter-esque economic malaise. Americans can useaffordable energy to grow, prosper, and thriveionly President Obama and Washington would stopimpeding this progress.

Energy abundance represents the promise o abetter way o lienot just more affordable prices,both at the pump and or consumer goodsbutalso the job opportunities that can provide a rungup on the social ladder. Americas entrepreneurialspirit, and the technological innovation o industry,have placed these goals within reach or millionso Americans. Its why we believe in the benefits oenergy abundancebecause we believe in America,we believe in the American Dream, and we believethat energy abundance can provide that dream tothe American people.

Figure 1: U.S. Unemployment Rate and Oil Prices7


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Unortunately, the Obama Administration doesnot believe in energy abundance. It has quashedthe production o oil and natural gas on publiclandsdenying the American people a betteruture by ailing to utilize resources owned by theAmerican people themselves. Its Environmental

Protection Agency (EPA) has embarked upon acrusade to jettison Americans affordable energysourcescoal at first, with oil and natural gaslikely to ollowraising prices or consumers, andundermining economic growth.

Te President and his allies have not attempted tohide or deny the harmul effects o their strategy.Afer admitting in the 2008 campaign that hisanti-growth agenda would cause electricity pricesto necessarily skyrocket, President Obama

appointed as his first Energy Secretary StevenChuwho publicly mused in 2008 that somehowwe have to figure out how to boost the price ogasoline to the levels in Europe.12At all levels, thisAdministration has acted in ways that will harmthe American economyall ostensibly to combatglobal warming.

But while the President purports his strategy willcombat the threat o climate change, in realitywasting Americas energy abundance will reduceoverall emissions very littleit will just migrate

jobs and affluence to other countries that havewisely chosen not to cripple their economiesunilaterally. When it comes to reducing globalemissions, this Administrations strategy ounilaterally placing a devastatingly high price oncarbon represents little more than a pipe dreambut when it comes to protecting American jobsand the middle class, its policies amount to aneconomic nightmare.

Americans deserve more than a stagnatingeconomy and a preponderance o low-wage,service industry jobs. Our orward-looking energypolicy encourages production on ederal as well

as state and private lands, which will lif theU.S. economy out o its ongoing doldrums andstimulate an unprecedented growth in high-paying

jobs. In this way, the American dream can finallybecome a reality or those trapped in povertyunder President Obamas energy-suppressing

policies.

CASE SUDIES: ENERGY PRODUCIONHELPING SAES ECONOMIESWhile much o the energy policy discussionstaking place in Washington center aroundprojections and models with unrealisticassumptions, the best place to examine the impactso robust energy policies is in the states actuallyproducing energy and benefiting rom it stateslike Louisiana, North Dakota, and exas.

In Louisiana, natural gas production is creatinghigh-paying jobs and lowering energy costs.Since 2007, Louisiana has doubled its natural gasproduction.13Utilizing its natural gas resourcesand production or exceptionally clean electricityproduction, Louisiana electricity prices are amongthe lowest in the nation.14

For 2013, Louisianas electricity prices averaged8.00 cents per kilowatt hour, versus the nationalaverage o 10.08 cents per kilowatt hour.15With

Louisiana electricity prices more than 20 percentlower than the national average, Louisianaresidents and businesses have more moneyavailable or a wide range o valuable goods,services, and job creation. Louisiana consumed85 billion kilowatt hours o electricity in 2013,totaling $6.8 billion in electricity expenses. HadLouisiana paid the same price as the nationalaverage, the cost would have been $8.5 billion. Asa result, Louisiana energy consumers saved $1.7billion in 2013 in lower electricity prices versus thenational average.

Residential electricity sales accounted or 35percent o Louisianas electricity use, meaningLouisiana residential electricity customers saved$600 million in their direct electricity bills.Divided among Louisianas 1.7 million households,the average Louisiana household saved $350 lastyear in direct electricity bill savings. Additionally,

The President and his allies have

not attempted to hide or deny theharmful effects of their strategy.


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Many other states can experience the strikingeconomic and human welare benefits broughtabout by oil and natural gas production in exas,North Dakota, and Louisiana. Unortunately, ourederal government wants to ensure that does nothappen. At the same time that newly discovered

energy resources and modern technologies arestimulating greater energy production on privateand state-owned lands, ederal policy is making itharder and harder to access our energy resourceson ederally-owned lands. Te ederal governmentowns the vast majority o land in the western thirdo the nation, as well as many large tracts o landin the eastern two-thirds o the nation.29Teselands contain vast energy resources that can powerstruggling local economies as they do in exas,North Dakota, and Louisiana. Only misguided

ederal policy prevents that rom happening.

In our nations heartland, a liberated nationalenergy policy would deliver particularly powerulbenefits. According to the U.S. Department oAgriculture (USDA), agricultural production andthe agricultural economy are particularly sensitiveto energy prices. USDA reports that armersrequire affordable energy to power tractors andother arm equipment, and energy costs are amajor actor in determining ertilizer prices:

Agricultural production is sensitive to changesin energy prices, either through energyconsumed directly or through energy-relatedinputs such as ertilizer.Over 2005-08,expenses rom direct energy use averagedabout 6.7% o total production expenses inthe U.S. arm sector, while ertilizer expensesrepresented another 6.6%. However, thesesector averages mask much greater energyintensities or major field crops. Agriculturalproduction is thereore sensitive to changesin energy prices, whether the changes arecaused by world oil markets, policies toachieve environmental goals, or policies toenhance energy security.30

For consumers everywhere, counterproductiveenergy policy is claiming an ever-greater shareo American household budgets. Te U.S. EnergyInormation Administration reports the average

U.S. household spent over $2,900 on gasoline in2012, approximately 4% o the average householdspre-tax income.31Tis was the largest percentageo household income spent on gasoline in nearlythree decades, with the lone exception o 2008.

Although overall gasoline consumption hasdecreased in recent years, a rise in average gasolineprices has led to higher overall household gasolineexpenditures, EIA reports.

High energy prices particularly affect seniors livingon fixed incomes and to middle class and lowerincome amilies. Middle class amilies earning

between $30,000 and $50,000 per year spend17% o annual post-tax income on energy costs,compared to just 10% in 2001. Lower incomeamilies making between $10,000 and $30,000per year spend 24% o annual post-tax income onenergy costs, compared to just 14% in 2001.32

Academic and think-tank discussions o energyofen lack a meaningul explanation o newpolicies real-world implications or living,breathing Americanspeople who work hardand get up every day looking or a better utureor themselves and their amilies. Tat is whyat America Next we have ocused our effortsintensively on what American energy meansor the American consumer, the Americaneconomy, and American jobsactors that manygovernment bureaucrats tend to neglect.

Energy is the lieblood o the American economy,

At the same time that newlydiscovered energy resources

and modern technologies arestimulating greater energy

production on private and staowned lands, federal policy ismaking it harder and harder to

access our energy resources

federally-owned lands.


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and America has the potential to becomethe world leader in energy development andinnovative energy policy in the coming century.But we must first create an environment thatencourages resource development, technologicalinnovation, and education o a workorce that will

lead America into economic prosperity. o growthe economy and ensure that America retains itsglobal leadership, we propose an energy platormorganized around six central principles:PRINCIPLE #1: Promote ResponsibleDevelopment O Domestic Energy ResourcesAnd Construction O Inrastructure o ransport It

PRINCIPLE #2: Encourage echnolocigalInnovation O Renewables And Emerging Energy

Resources

PRINCIPLE #3: Unlock Te Economic PotentialO Te Manuacturing Renaissance By PuttingAmericas Energy Resources o Work

PRINCIPLE #4: Eliminate BurdensomeRegulations

PRINCIPLE #5: Bolster National Security

PRINCIPLE #6: ake Simple, angible Steps

o Address Te Possible Risks O Climate Change,In Concert With Other Major Economies

Governor Bobby JindalHonorary Chairman

Congressman Bill FloresCo-Author


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OIL AND NAURAL GASIn many respects, oil is the lieblood o theAmerican economy. It is our largest source oenergy, providing almost 37% o total energyconsumed in the U.S., significantly more than anyother source.33 Moreover, 70% o this oil is used intransportation.34While there are some alternativesin the transportation sector, 93% o U.S. energyused in transportation comes rom oil.35Tisimportant resource cannot be easily replaced withother uels, despite substantial gains in naturalgas, electric, and hybrid vehicles, and a ederal

renewable uel mandate that has ailed to meet itsgoals.

While we support the development ocommercially viable alternatives, in the short term,we have ew commercially viable substitutes oroil, which makes maintaining Americas leadershipin oil production essential or both our economyand national security. Te ederal governmenthas tried to mandate uels and technologies thathave resulted in unintended consequences. Tebelies o ederal bureaucrats notwithstanding,Washington remains ill-equipped to micro-manage a rapidly evolving energy landscape, andshould not be picking winners and losers in the

marketplace.

Furthermore, or many rural Americans heatingoil remains a critical lielineand lef-wing plansto raise taxes on oil, making it less affordable, are adirect threat to those rural Americans well-being.

America is, and has long been, a global leader inoil production. And with the growth o hydraulic

racturing enabling producers to access tight oil, aso the first quarter o 2014, the U.S. is the largest oilproducer in the worldand is expected to remainin the number one spot through the next twodecades.36A combination o technological savvyand entrepreneurial spirit has led to Americanglobal leadership in production despite theobstacles thatonly a short time agomade shaleoil and natural gas inaccessible.

KEYSONE XL PIPELINEBUILD I NOWTere is no logical, scientific, economic, or

environmental reason not to approve and build theKeystone XL pipeline right now. At this point, theObama Administration is simply bowing to theradical Lef, and causing urther harm to Americaseconomic interests. It is air to say that when itcomes to the Keystone XL pipeline, our Presidenthas become a science denier.

Te Obama Administrations shameul ditheringon approval o the Keystone XL pipeline hassent a message to Canadaour riendly, reliableneighbor to the norththat its abundant, reliableenergy supplies are not welcome here. As long asthe radical Lef drives the policies set by the WhiteHouse, a North American energy community willbe nothing more than a pipe dream. Te KeystoneXL delays have cost thousands o jobs and revealedAmerican strategic weaknessall to placate thedesires o environmental radicals, backed bywealthy donors who wont crimp their luxuriousliestyles, but expect others to do so. Americashould not rely on energy rom geopoliticallyunstable regions o the world that do not share our

values.

By ailing to approve Keystone XL, the ObamaAdministration is leaving behind American jobsand American energy needs in the global growthrace. Te Canadian government recently gavepreliminary approval to the Northern Gatewayproject; when completed, the pipeline willtransport oil sands crude rom Alberta westward

While there are some alternativesin the transportation sector, 93% of

U.S. energy used in transportation

comes from oil.

P : P R DO D E R A CO I T T I


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people, not by our lef-wing President. TeAdministration has trumpeted Americas oilproduction growth, while ignoring the act that allsuch growth has happened entirely on state andprivate lands. Te data over the last ew years arestark: On ederal government lands, oil production

has declined 6.2% during the hydraulic racturingboomas the figure above shows. However, oilproduction has surged a stunning 61% on privateand state-owned lands in just our years. Tisenormous discrepancy illustrates the untappedpotential resources that the Administration doesnot want to see developed or the benefit o theAmerican people.

While America experiences an economic boostrom domestic shale oil and natural gas production,another economic opportunity awaits us right off

o our shoresyet the current Administrationspolicies have closed the door to these opportunities.Currently, 87% o the Outer Continental Shel(OCS) remains off limits to oil and natural gasdevelopment, compliments o the Administrations2012-2017 Five Year Plan.44According to a 2011study conducted by Wood Mackenzie, opening upthese areas could increase production by 4.2 million

barrels o oil equivalent per day, create nearly450,000 new jobs, and generate over $313 billion innew revenue or state and ederal governments.45

Te Bureau o Ocean Exploration andManagement (BOEM) estimates that 88.6 billion

barrels o oil and 398.4 trillion cubic eet onatural gas may be held in the OCS. However,because these resource estimates are 30 years old,current data may actually under-estimate the vastpotential resources lying just off our shores. oully realize the potential o these OCS resources,the Administration should allow seismic surveying.In July, the Obama Administration announcedthat it will permit companies to conduct seismicsurveys o the Eastern Seaboard, which willallow energy companies to gather preliminarydata on oil and gas deposits. Tis announcement

appears to be a step in the right direction; however,requirements or survey permits that are not basedon sound science could discourage companiesrom gathering data crucial to developing theseresources.

In addition to the vast resources that lie untappedin the OCS, the Arctic National Wildlie Reserve

Table 1. U.S. Crude Oil Production: Federal and Non-Federal Areas FY2009-FY2013

(Barrels per day)

Fiscal Year U.S. Total Non-Federal

Total Federal

(% of U.S. Total)Federal

Offshore

Federal

Onshore

2013 7,235,000 5,576,700 1,658,300

(23)

1,294,000 364,465

2012 6,241,000 4,598,000 1,643,000(26.3)

1,303,300 339,700

2011 5,552,000 3,826,500 1,725,500(31)

1,415,600 309,900

2010 5,438,800 3,463,700 1,975,100(36.3)

1,680,300 294,800

2009 5,233,000 3,464,400 1,768,600(33.8)

1,482,900 285,700

Source: Federal data obtained from the Office of Natural Resources Revenue (ONRR) Statistics, as of February2014, http://www.onrr.gov (using sales year data), March 2014.

Notes: U.S. Fiscal Year Total data derived from EIA monthly production data contained in its publicationPetroleum and Other Liquids, U.S. Field Production of U.S. Crude Oil, March 28, 2014, http://www.eia.gov. Dataincludes lease condensate, defined by EIA as a liquid hydrocarbon recovered from lease separators or fieldfacilities at associated and non-associated natural gas wells.

Figure 2: U.S. Crude Oil Production in Federal and Non-Federal Areas 2009-201343


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(ANWR) has the potential to produce a millionbarrels o oil per day.46And while radicalenvironmentalists have opposed drilling in ANWR,it is important that one look at the acts. In 1980, aDemocratically-controlled Congress and PresidentJimmy Carter set aside 1.5 million o ANWRs 19

million acresless than 8 percent o ANWRs totalareaor potential oil and gas development.47 Tearea, also known as 1002 Area, that can be used orproduction or support acilities is limited to 2,000acresless than 0.01% o ANWRs total acreage.48Te US Geological Survey has estimated that the1002 Area could contain 10.4 billion barrels orecoverable oilwhich, at current prices, amountsto over $1 trillion in natural resources the ObamaAdministration does not want to utilize.49

Opening up ANWR to responsible developmentcould generate $150 billion to $296 billion in newederal revenue, helping to reduce our nations debt,create tens o thousands o American jobs, andincrease our national security.50 We can develop1002 Area in a responsible manner that minimizesenvironmental impact and protects Alaskas scenicbeauty and wildlie.

Despite the tremendous potential o ANWRsnatural resources, Congress has not allowed itsdevelopment. But any nation serious about an

energy policy must base its decisions on act, notfiction. Developing ANWR in an environmentallyresponsible manner will enhance our nationseconomic, energy, and national security.

Furthermore, increasing production in newareas can provide substantial benefits, with statesgranted the flexibility to dedicate a portion o theproceeds rom exploration in new areas used tound local environmental conservation efforts.Legislation passed by the Republican House oRepresentatives in June 2013 would dedicate 37.5percent o revenues rom new Outer ContinentalShel exploration back to states.51 Despitesignificant support rom governors in states withOCS resources, the Democratic Senate has ailedto advance the legislation.52

Louisiana has led the way in many efforts that usethe benefits o expanded energy production to

und conservation programs. Te Coastal ImpactAssistance Program (CIAP) and others haveprovided substantial revenues or environmentalprotection out o a portion o oil productionrevenues. Tis model can simultaneously enhanceour energy leadership while boosting unding or

conservation, restoration, and similar development.One could imagine similar efforts in locales such asAlaska, where revenues rom new oil developmentin currently non-producing areas could provideunding or state and national wildlie protectioninitiatives. Alternately, a small portion o thisunding could also boost ederal energy R&Defforts. Many states revenue bases have yet ully torecover rom the economic downturn; additionalincome rom offshore exploration would allowstates an additional source o unding or each

states spending priorities.

Te ederal government would also receiveincreased revenues due to expanded energyexploration. Congress could dedicate theederal share o offshore royalties towardsincreased unding on priorities like educationand inrastructure, or a lower tax base or allAmericans.

HE BENEFIS OF INCREASED NAURALGAS PRODUCIONTe tremendous growth in natural gas productionthrough advances in hydraulic racturing hasundamentally transormed Americas energylandscape. In states where the gas boom hasbeen particularly strong, such as Louisiana,exas, Pennsylvania, and other states, it hastransormed entire economies, bringing jobs tocommunities that were previously desperate oreconomic opportunity. Less than a decade ago,experts saw the U.S. with dwindling natural gasreserves and just a decade or so o supply. Nowadvances in hydraulic racturing have opened upalmost a centurys worth o natural gas supply, and

Louisiana has led the way in man

efforts that use the benefits ofexpanded energy production to

fund conservation programs.


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In addition, natural gas may be a viable alternativeor consumers in some regions, but the Northeastlacks the capacity to meet the needs o consumersand utilities during peak winter monthsmeaningthe New England states cannot ully utilize theaffordable natural gas produced rom areas such

as the Marcellus shale.68In January o this year,unusually cold weather and winter storms sentnatural gas prices skyrocketing in the Northeast,orcing many power generators that normally relyon natural gas temporarily to switch to oil.69EPAsburdensome regulations will only exacerbate thisproblem, by leading to the early retirement onuclear and coal-fired power plants in the regionincreasing utilities dependence on natural gas,even as the region suffers rom a lack o capacity todeliver it.

Increasing capacity to the Northeast is the key toensuring that this region can take ull advantage

o our abundant domestic natural gas supplies.Tis means removing red tape that unnecessarilydelays inrastructure projects, and ensuring thatpipeline projects are not caught up in litigationspearheaded by radical environmentalists.

Recommendations:

Take a comprehensive approach to energyresource development or both traditionaland emerging energy resources, enactpro-growth policies, and cut regulatoryred tape that will allow us to increasedevelopment o our oil and natural gasresources both onshore and offshore.

Allow states to opt-in to new energy

exploration on the Outer ContinentalShel, with revenue-sharing or thosestates who decide to participate. States

should be allowed to decide whether toutilize the energy resources located offtheir shores. Likewise, states should sharein the proceeds o the new revenueoffshore drilling can generate, as they arebest positioned to decide or themselves

how to spend, or save, the proceeds otheir natural resources.

Create a level playing eld, by eliminating

unjustifiable subsidies on and barriers toenergy production and consumption.

Avoid a one-size-ts all federally-drivenshale gas development policy. Washingtonshould ocus first and oremost oneliminating regulatory bureaucracy in a

way that lets world markets driveinvestment.

Ensure the continued development of thehydraulic racturing revolution in theoil sector with emphasis on state regulation,not one-size-fits-all ederal regulation. Whenit comes to hydraulic racturing, as withmany other policy areas, the ederalgovernment should deer to the states, whichhave unique geology, inrastructure, andregulatory systems. Washington should trust

states to set policies that set the right balancebetween environmental stewardship andproduction. Every state wants to ensuresae environmental perormance, andnatural resources regulation at the statelevel can ensure efficient oversight.

Allow environmentally responsible energyresource development on state and ederallandsboth onshore and offshore.

Encourage turning waste streams intovalue streams by eliminating regulatorybarriers that impede the use o CO2in Enhanced Oil Recovery (EOR) andother beneficial uses o CO2. EOR hasreduced carbon emissions whilesimultaneously boosting oil productionamodel already working in many locales.

Increasing capacity to theNortheast is the key to ensuring

that this region can take full

advantage of our abundantdomestic natural gas supplies.


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Repeal the section 526 mandate,which prohibits the ederal governmentrom purchasing any alternative uelunless its liecycle greenhouse gasemissions are less than conventionalpetroleum uels. Tis provision

included to stop coal-to-liquid projects onthe incorrect assumption that affordablebiouels would quickly come to marketcould lead to EPA mischie making. Over-eager regulators could use this mandate tocut off imports rom Canadian oil sands,depriving America o a secure orm oenergy rom a trusted, stable ally.

Enable the creation of pipeline

inrastructure allowing crude to go to the

refinery best positioned to maximize itsvalue, while also ensuring that wehave robust import and export marketsto take advantage o our refining capacity.A better pipeline inrastructure will allowus to use more American crude at hometo serve American markets, by improvingits economic attractiveness. Te U.S.should remove regulatory roadblocks anddelays that impede construction o vitalpipelines.

Improve the Endangered Species Act(ESA) so that it cannot be used byradical lef-wing groups and anti-development bureaucrats to shut downenvironmentally sound gas explorationand production.

Encourage a market-based approach tonatural gas as a transport uel and ensurethat our regulatory system regardingueling stations is flexible enough topermit innovation.

Streamline oil and gas pipelineinrastructure regulation to addresschanging marketplace realities. Rightnow, oil and gas pipelines ofen receivedisparate treatment, a lack osynchronization reflecting their differentregulatory histories. Investors need clarity

and certainty rom government beoredeciding where and how to invest.

COALExtreme environmentalists, including the ObamaAdministration, have waged an increasingly open

war on coal over the past decade, one that threatensAmericas energy affordability and security. AsPresident Obama told the San Francisco Chroniclein early 2008 when discussing energy markets underhis preerred cap-and-tradeprogram or CO2 emissions:

I somebody wants to build a coal plant,they canits just that it will bankrupt them.In the same interview, he told the [SanFrancisco] Chronicle editorial board that

under my plan. . . electricity prices wouldnecessarily skyrocket.70

Tat may be the most succinct summary o the ObamaAdministrations energy policybut its not whatAmerica needs.

President Obama has ollowed through on his promisethrough his EPAs radical decision to essentiallymandate the closure o many o Americas coal-firedpower plants, while making uture electricity ratessoar by regulating carbon dioxide emissions rom

these plants. We believe that the 5-4 Supreme Courtdecision in Massachusetts vs. EPA allegedly justiyingthis action is undamentally flawed, and a classicexample o ederal government regulatory overreach.

Tat said, even on its own terms the rule is a disaster, a645-page monument to bureaucratic obuscation thatrewards insiders and dealmakers.71It arbitrarily pickswinners and losers among both states and power plants,and undamentally pushes states into a cap-and-tradesystem that has already shown great potential or abusein Europe and elsewhere. While the EPA claims theproposed regulations give states flexibility, it does soonly to the extent that states can decide which sectorso their economy they wish to harma Faustianbargain to which states and governors should notaccede. States that decide to comply with the ObamaAdministrations unilateral energy disarmament willjeopardize American jobs and American interests vis--vis our trading partners.


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President Obamas anti-coal policies havedevastated jobs in communities across thecountryleaving areas such as those inAppalachia crippled. Te coal industry supports800,000 jobs across 25 statesbut the ObamaAdministrations agenda will put many o those

jobs at risk.72According to a Heritage Foundationstudy, Obamas war on coal may cost America500,000 jobs by 2030, resulting in 20% higherelectricity prices.73Rather than adding to thefinancial burdens o these hardworking Americans,we need to figure out the best ways that we cantake advantage o this abundant and cost-effectiveresource.

Te Obama Administration operates under theantasy that i we set an example, China, Russia,and our other competitors will magically choose toharm their own interests in the global economy

because their leadership is ull o environmentallyconscientious nice guys that put the globalgood ahead o their countries interests. TeAdministration appears more keen on negotiatingwith our competitorswho have every interest inobtaining an economic advantage over the UnitedStatesthan with a Congress and an Americanbusiness community interested in promotingstrong growth at home hand-in-hand with ourenvironmental goals. With this proposed rule,the Administration has olded Americas hand onenergy, and now they expect our competitors to dothe samea strategy akin to believing that Russiawould never invade Ukraine because that is so lastcentury. Tey are certain to be disappointed.

Contrary to those who support this liberal antasy,American energy policy must advance our interestsby creating policies that deal with the reality oour energy mix: coal remains a vital component o

Americas energy mix, and the largest contributorto Americas electric power supply. Furthermore,Americas coal reservesthe largest in the worldconstitute a powerul energy assetone that weshould be learning how to use more effectively andefficiently, rather than shutting it down.

While politicians debate whether we shouldor should not export crude oil and natural gas,America has been busy exporting its abundant coalreserves to other countries. According to a studycommissioned by the National Mining Association,in 2011 10 percent o the coal produced in the USwas exported, supporting thousands o workers.74Te proposed EPA regulations that would makecoals use economically ineasible in the UnitedStates will only exacerbate this trend. Ironically,

the EPAs proposals will encourage companiesurther to increase shipments o coal overseasdoing precious little to stop global warming, butexporting affordable energy and quality jobs tocountries like China and India.

A smart energy policy would reject proposals thatwould unilaterally harm the American economyby rittering away our domestic energy abundance.Instead, we should utilize our existing coal reservescleanly, both through our existing plants andthrough the development o new cleaner coal

technologies, rather than arbitrarily shutting downexisting inrastructure. Tis strategy is a ar betterplan than the Obama Administration strategy oletting this enormous energy resource sit unusedwhile China, India, and other major countriescontinue to consume coal in record amounts.China has added more coal production in the pastew years than the entire U.S. coal industry.Te radical Lef talk requently about globalwarming, but they seem unable to reconcilethemselves to a global energy economy inwhich other countrieswhich have nothing togainail to ollow our example by similarlywasting resources that can drive economic growth.Americas coal policy should work to leverage thistremendous domestic resource. Te U.S. shouldnot unilaterally disarm, nor should it simply wasteits coal resources.

According to a Heritage

Foundation study, Obamas war oncoal may cost America 500,000jobs by 2030, resulting in 20%

higher electricity prices.


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the U.S. stands at a crossroads. A complex thicketo regulations and litigation has meant the ederalgovernment has not issued a license or a newnuclear plant in over 30 years. And while some newconstruction has taken place recently, the ederalgovernments attitude towards nuclear energy over

generations has ranged rom salutary neglect towardoutright hostility.

Nuclear power is a zero-emissions energy sourcecleanly powering 20% o American electricity.76While nuclear power costs more to produce thancoal, natural gas, or hydropower, nuclear powercosts substantially less to produce than otheremissions-ree competitors, namely wind and solarpower.77Nuclear also has a relatively small ootprintin comparison to wind and solar.

New design concepts also provide great promise.Small modular reactors utilizing advanced newtechnologies could lower production costs, perhapsby as much as 40%.78

Federal energy policy should recognize thegame-changing advances in nuclear technologyand encourage ongoing nuclear research. Just asimportantly, the ederal government must trim backthe excessive, unnecessary, and expensive red tapethat has prevented a new nuclear power plant rom

coming online in the United States since 1996.79

Any growth in nuclear power must put saetyfirst. In that regard, the industry maintains anoutstanding history, with an impressive health andsaety record. However, as Physics Nobel LaureateBurton Richter wrote:

Te U.S. program has been in systematic decline.We are no longer the leader in matters o policybecause the ederal government has not

been able to agree on one. Bit-by-bit, ourR&D acilities and national laboratories havebeen allowed to decay and we are no longerthe leader in manuacturing because we aredown to only one U.S.-owned reactor builder[General Electric].80

Figure 4: Growth in Nuclear Power Plant Construction 1955-2011Cumulative Construction Permits(red line) and Plants in Operation (blue line)82


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In addition, a thicket o regulations has createduncertainty and increased prices or nuclear power.In many cases, radical activists contribute to thisuncertainty, by attempting to sue any new nuclearpower plant into oblivion. Consequently, nuclearpower is currently more expensive than the least

expensive ossil uel alternatives; however, like somerenewables, continued development o some nuclearpower can be justified as part o a portolio strategy.

Nuclear power maintains the substantial advantageso a high degree o price predictability and zeroemissions, making environmentalists oppositionto nuclear energy an example o ideology runamok. Nuclear energy remains the largest zero-carbon energy source in Americas portolio,exceeding all renewable energy technologies

combined. Furthermore, the nuclear industry, givena different regulatory regime, could turn much oits waste to beneficial use, recycling nuclear wasteto dramatically reduce its volumes. EconomistPierre Desroschers has showed how in industry aferindustry, producers reduce waste in response to theirown market incentives to do so.81 In addition, theindustry has proposed innovative reactor designsthat would dramatically reduce nuclear waste.

Several policies have the potential to improveAmericas nuclear standing. First, recognizing the

unique nature o the extremely lengthy approvalprocess or nuclear power plants, the U.S. couldoffer ederal loan guarantees only against theprospects o unexpected regulatory delay, nottechnology risk or execution ailure. Tis policywould recognize the governments substantialrole in reducing industrys ability to operate, andeliminate the penalty or doing so. As anotherpossible alternative, policy-makers could pursuestreamlined permitting processes or newreactors.83

Te Yucca Mountain storage acility or spentnuclear uel was approved in a bipartisan mannerby Congress in 1987 afer extensive research andconsideration o various potential sites. Whilenumerous government studies have ound YuccaMountain in Nevada to be a suitable solution orthe storage o Americas long-term nuclear waste,both residents and politicians in Nevada have

raised objections to the site.

Te Senate Majority Leader and the currentPresident have raised saety concerns regardingthe Yucca Mountain acility. However, the statusquo alternativein which spent nuclear uel is

currently being stored on-site and above groundat temporary, minimally secured storage acilitiesnationwideis undamentally untenable. Ourenergy plan recognizes the wisdom and necessityo utilizing nuclear energy. But no proposal to dothat is realistic absent a plan or storage o long-term nuclear waste.

Recommendations:

Fund basic research into the development

o commercial-scale first-o-a-kind smallmodular reactors (SMRs), consistent with the governments historical role in helping to develop nuclear technologies.

Revamp Americas domestic nuclearexpertise and manuacturing capabilityto reduce international dependence. TeU.S. government should look orappropriate ways to incentivize a rebirth o

domestic nuclear technology andmanuacturing.

Oer the people of Nevada and theirelected leaders additional financialincentives and a concrete timeline or afinal decision on making Yucca Mountainour storage solution or nuclear waste.

Allow other states to bid on potentialnuclear repository sites, indicating thecompensation they would request ortaking the waste, i Nevada declines new

financial incentives. Any potential sitewould have to be thoroughly vetted,geologically sound, and researched orsuitability and saety. o avoid wastingtax dollars, states would have to sign abinding contract beore any site is built.


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boom and bust environment will grow newsources o energy and the new jobs that come withthem, we believe that the best road orward or

these industries is one that allows them to thrive ina competitive crucible, pushing down costs in waysthat justiy a growing share o our energy portolio.I we allow market orces to prevail, we can growour jobs throughout the energy sector, and themillions o jobs that depend on them.

Tat said, we believe that there are more cost-effective ways o incentivizing the development oenergy than the current system o tax subsidies.All orms o energyrom oil and gas to wind andsolarshould compete on a level playing field,

with the ederal government not picking winnersand losers. Our plan envisions a movementaway rom special ederal subsidies or specificindustries, with an appropriate transition period toallow individuals who have invested and plannedtheir lives around current ederal policies torecover their costs. Te ederal government shouldnot attempt to pick winners and losers.

And to be clear, we oppose raising taxes onenergy production. Energy is the lieblood o theAmerican economy, andparticularly given the

anemic economic growth o the Obama yearsweshould not raise taxes on an industry that createsjobs on its own, while also lowering costs or othersectors o the economy. Government policiesmust be evaluated based on whether they lowerthe cost o energy and create jobs. oday, PresidentObama appears to evaluate energy policies based onwhether or not they increase costsand make himpopular with Hollywood celebrities and liberal elites.

Instead o utilizing explicit taxpayer subsidies orspecific sectors and industries, ederal policy should

instead work to expand innovative, sound financingoptions or all orms o energy. Under current law,some orms o energy generationoil, mineralextraction, natural gas, ethanol, and biodieselhavethe ability to orm master limited partnerships(MLPs), while other sectorsor instance, windand other renewable energy sources, and nuclearpowerdo not.90MLPs provide companies with

Figure 5: Growth of Renewable Energy Production 1990-201289


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a partnership structure, while allowing themthe benefits, flexibility, and liquidity o tradingownership stakes on the stock market. Extendingthese benefits to all orms o energy would levelthe currently unequal playing field among varioussectors, and provide particular benefits to renewable

industries not currently able to orm MLPs, like thewind and solar industry.

Renewable uels are not just limited to solar andwind, however. In liquid uels, ethanol and otherbiouels have long played a substantial role inAmericas energy mix, one that accelerated overthe last decade. Te corn and biouel industrieshave made an important contribution to Americasnational security, by developing another energysource ree rom the whims o oreign potentates.In Louisiana and elsewhere, companies are makinginvestments in acilities converting sugar cane

bagasse into high-value biouels. Te rapid growthin the sector, coupled with advances in hydraulicracturing, suggests that, thanks in part to a robustbiouels industry, a uture o American energy sel-sufficiency is within reach.

Te success o the ethanol industry over the pastdecade suggests that a gradual phase-out o theRenewable Fuel Standard (RFS) mandate wouldallow this maturing industry to compete andthrive on a level playing field with other orms oenergy. Because these uels will continue to playa vital role, we must ensure that they do so withinan overall ramework o market competitiononewhich eschews government-imposed mandates.However, while government should not pickwinners and losers in the marketplace, it alsoshould not make abrupt and radical policy changesthat disincentivize investment. In short, thegovernment should not turn specific sectors rom

winners to losers overnight. Instead, ederalpolicy should provide a gradual transition awayrom all sector-specific subsidies and mandates,including requirements like the RFS. In addition,the ederal government should continue to undbasic research and development into more efficient

orms o ethanol and biodiesel.

Conventional hydropower has long comprised thebackbone o Americas renewable power efforts,providing clean, affordable baseload power toAmerican consumers. New hydropower projects,however, are ofen caught in unreasonable permittingdelays. Te ederal government should streamlinethe permitting process or new hydropower to ensurethe continued presence o this clean and affordableenergy source as part o our national grid.

Hydropower is relatively inexpensive and, whenproduced by large-scale dams, is the least expensiveelectricity source.91It is no coincidence thatWashington State produces more hydroelectric powerthan any other state and also has the nations lowestelectricity prices.92In addition to being less expensivethan other renewable energy sources such as windand solar, hydropower is much more reliableandemissions-ree. States like Connecticut,93Missouri,94and Montana95have taken steps to includehydropower in their renewable power mandates.

Because the next best source o energy we have is theenergy we do not waste, energy efficiency, i doneproperly, can be the cheapest orm o energy available.So-called negawatts (i.e., megawatts o energysaved through efficiency) are ofen ar cheaper thaninstalling new megawatts.

Intelligent energy efficiency regulation or newconstruction, ocusing on projects which have veryast payback (i.e., three years or ewer) can makesense. At the same time, these benefits should not beoverstated as a justification or overly heavy-handedregulation, especially at the ederal level. A recentpaper by Arik Levinson o Georgetown University,one o President Obamas appointees to the Councilo Economic Advisors, suggests that more than 90%o Caliornias touted energy efficiency gains overthe last several decades are a statistical myth. Evenproponents acknowledge that the substantial majority

The corn and biofuel industries

have made an important

contribution to Americas nationalsecurity, by developing another

energy source free from the whims

of foreign potentates.


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o the alleged efficiency gains are in act, illusory, theproduct o structural transormation o the economyrather than true energy savings.96

Renewable Portolio Standards (RPS) have becomea popular way or states to boost renewables, with

30 states and the District o Columbia enactingmandatory renewable portolio standards andseven others enacting non-binding, voluntarygoals.97While renewables can play a valuable roleas part o our energy portolios, some memberso Congress continue to engage in misguidedattempts to enact a ederal Renewable PortolioStandard (RPS). Current RPS standards at thestate level vary widely in terms o includedtechnology, size o renewables in the portolio, andother characteristics. Federalizing such standardsinto a one-size-fits-all approacha typical

Washington movewould be a strategic mistakewith negative consequences or our economy.

Recommendations:

Rationalize the energy taxation systemor financing all orms o energybothrenewable and non-renewablewithewer carveouts and tax incentives.

We strongly oppose raising taxes on energy production. In the important work

o tackling subsidy reorm, we shouldnot pick and choose among existingsubsidieswe should attempt an acrossthe board reorm that lowers taxes on

energy production while consistentlyreducing carve-outs.

Encourage innovative, sound nancingoptions or all orms o energy, as analternative to explicit tax subsidies. Ratherthan ocus on production subsidies, weshould enact ederal legislation that willprovide all energy sectors with easieraccess to private-sector capital markets.We should also reorm regulatorypolicies so that renewables have a

Because the next best source of

energy we have is the energy wedo not waste, energy efficiency,

if done properly, can be the

cheapest form of energy available

Figure 6: Decline in Price of Solar Panels 1977-201398


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better chance o competing on a levelplaying field. Different financingmechanisms, including communitysolar, on-bill repayment, and MasterLimited Partnerships (MLPs) in renewablefinance could dramatically expand

opportunities or renewables.

Create a level playing eld betweenethanol and other orms o energy.Ethanol should remain an important parto Americas energy uture, but it is matureenough to compete and thrive on its ownmerits. o respect existing investmentsand create an expectation o stable andpredictable rules, we should graduallyphase out the Renewable Fuel Standard,

allowing existing investors and individualswho have planned their lives aroundcurrent ederal policies to transition whilemoving toward a more market-centeredapproach to ethanol production andconsumption.

Develop and grow more ecient ethanolblends through ederal unding o R&Dinto new orms o biodiesel.

Avoid a federal Renewable Portfolio

Standard. While RPSs have been enactedby 30 states as a way to boost renewables,they should not be part o any ederalenergy policy.

Increase energy information disclosure

requirements or energy-intensive productpurchases, so consumers, not bureaucrats,can decide what works best or theirbudgets. Programs such as Energy Staror those that list expected uel costs orvehicles can provide a valued service toconsumers, while potentially reducingnational energy demand and enhancingour energy security. In general, wherelietime energy costs o a good comprisea substantial portion o its purchase price,consumers should have the right to knowabout those costs. Energy disclosureregulations can be an effective way to

inorm consumers o lietime productcosts without orcing people to buy moreefficient products they may not want.

Implement renewables more eectively into the grid. Current renewables are

intermittent, and not always availablewhen needed. More effective wind andsolar orecasting, and better computermodels to more tightly integraterenewables into a more modernizedgrid, can help efficiency. In general, many

ederal policies can help enable the increased penetration o distributed power

resources on to the grid. Working tocombine intermittent renewables withast-ramping natural gas backup, enabled

by the racking revolution, can also lead topromising outcomes.

Demonstrate a sustained Americancommitment to energy RD&D (Research,Development, and Demonstration),both through legal and regulatoryreorms that can unleash greater privatesector financing or emerging technologies,and through sustained and predictablesupport o RD&D at the ederal level. Atthe same time we must end the

governments role as a ourth-rate venturecapitalista role that brought us Solyndraand other debacles which wasted taxpayerdollars in a cavalier manner.


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While the Obama economy has crippled U.S.growth, one promising sign amidst the downturnhas been the growth o U.S. manuacturing,particularly in energy-intensive industries.Tis growth has come rom the availability oabundant, low-cost natural gas brought into themarket through advances in hydraulic racturingtechnology. Unortunately or the Americanpeople, the Obama Administration has impedednatural gas production, holding back thispromising uture. Our orward-looking energyplan, by contrast, will unleash an Americanmanuacturing sector revving its engines and readyto create an unprecedented number o high-paying,quality jobs.

Manuacturers use approximately one-third othe energy produced in the United States, makingenergy prices one o the most important actorsin manuacturing growth. Advances in hydraulicracturing technology have greatly expandednatural gas production and lowered natural gasprices. Te racking boom has put a halt to along-term decline in Americas manuacturingcompetitivenessbut merely halting the declineshould not represent success or a global energy

leader. Te Obama Administration is stiflingenergy production on ederal lands, leaving stateand private lands the sole players in Americasenergy revolution. It is time or ederal policy tolead Americas energy revolution rather than fightit. Our energy plan will help spur a rebirth inAmericas manuacturing sector.

Te energy abundance created by unconventionaloil and natural gas holds enormous economicpotential across the entire economy. PwC reportsnew natural gas production opportunities can add1 million manuacturing jobs to the U.S. economyby 2025; with shale gas resources more abundantthan previously thought, U.S. manuacturers canlook orward to multiple new opportunities and asignificant uptick in employment in the sector.99

Te petrochemical industry benefits enormouslyrom hydraulic racking, as it utilizes naturalgas-derived liquids (Ethane, Propane, and Butane)as undamental eedstocks to make the buildingblocks used in a variety o products. Te declineo natural gas prices led to a reduction in theprice o ethylene rom over $1,000 per ton to just$323 per ton, a transormation that made theU.S. the worlds low-cost producer o this criticalmanuacturing eedstock.100 Tese lower pricesor producer inputs mean that U.S. manuacturerscould lower their raw materials and energy costsby as much as $11.6 billion annually, creating more

manuacturing jobs, more affordable goods, and amore robust economy.101

Te natural gas renaissance has amounted to amassive stimulus program across many partso the country, with companies considering oralready implementing major new projects andworkorce expansions as a result o enhancednatural gas production and lower prices. InLouisiana and the Gul Coast region alone, DowChemical, Formosa Plastics, Chevron PhillipsChemical, Westlake Chemical and Nucor plan

major new business expansions. Te projects holdtremendous economic benefits, with the FormosaPlastics project alone accounting or $1.5 billion innew investments.102In the Northeast, Bayer Corp.and Shell Oil are planning new acilities to takeadvantage o Marcellus Shale gas, while U.S. Steeland Vallourec have invested millions in new plantsin Ohio.

P :U E PO M R B PA E R W

The Obama Administration is

stifling energy production onfederal lands, leaving state and

private lands the sole players in

Americas energy revolution.


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It is also important to highlight the competitiveedge our domestic, natural gas-basedpetrochemical industry has over its globalcompetitors, particularly those in Europe, whichofen depend on oil as a eedstock or theirpetrochemical industries. According to IHS,

because o Americas increased domestic naturalgas production, With natural gas now availableat a raction o its oil-equivalent price, the UnitedStates has become one o the worlds lowest-cost petrochemical producers.103In addition,this significant cost advantage is a key actor indetermining where companies choose to build newpetrochemical acilities and what eedstock willbe used to produce its output. Te U.S. chemicalindustry will gain a significant competitiveadvantage, with natural gas now available at a

raction o its oil-equivalent price.104

U.S. basedpetrochemical companies will not only benefitrom availability o low-cost eedstock, but alsorom cheaper energy to run their acilities.105

Tis renaissance in energy production has helpedto restore U.S. manuacturing competitivenesswith low-priced Chinese products. CharlesSchwab & Co. reported earlier this year: U.S.export gains have come at the expense o leadingEuropean nations, Japan, and China.Chinasmanuacturing cost advantage over the United

States is projected to shrink to just 5% by 2015.106Companies like Nucor have decided to invest inthe United States, as opposed to Brazil or China,precisely because o our access to more affordableenergy sources; plentiul gas suppliesofferthe prospect o creating thousands o jobs byproviding a reliable energy source or domesticmanuacturing.107

In Convent, Louisiana, a new direct reduced ironplant epitomizes the potential economic benefitsAmerican energy can provide. Te plants initial$750 million investment will take advantage oabundant and affordable natural gas to providehundreds o new jobs at the acilityeach payingan average salary o $75,000 annually. I additionalphases come to ruition, investment could growto over $3 billion, employing more than 1,000individuals.108Tese new jobs are just the tip othe iceberg or economic growth and job creation

made possible by the natural gas renaissance.

With the natural gas industry announcing newinvestments across the country, announcementslike those in Convent only stand to increase asthe racking revolution gains steam. But there

is a catch, o course. Te U.S. government needsto give the industry what it wants, such as moreaccess to ederal land or drilling and no newregulatory obstacles.109

Unortunately, however, the ObamaAdministration insists on stifling rather thanencouraging this tremendous economicopportunity. Te Congressional Research Service(CRS) reports oil and natural gas production onederal lands has declined, even as the racking

revolution stimulates a tremendous increase inproduction on state and private lands. Accordingto CRS, natural gas production on state and privatelands increased by 33% rom 2009 to 2013, whileproduction on ederal lands ell by 28%.110

Te economic boom generated by hydraulicracking on private lands proves the growthpotential o the resources sitting on ederallands that the Obama Administration reusesto unlock. As IHS-CERAs study on energy andmanuacturing showed, the ull value chain or

new unconventional oil and gas, i.e., the hydraulicracturing revolution, supported 2.1 million jobsby 2012, a number expected to grow to almost ourmillion jobs by 2025. Cumulatively these new jobswill provide trillions o dollars in economic output,and more than $1.6 trillion in tax revenue through2025. By way o comparison, $1.6 trillion exceedsthe combined total o all ederal, state and localincome taxes collected in the first year o the BushAdministration.111

Te economic growth rom the racking boom doesnot even take into account the enormous value and

job creation generated by our conventional energyproduction or emerging energy sources. However,90% o this new unconventional oil and gas activityoccurs on state or private lands.112 I we couldboost ederal production by cutting red tape andbureaucracyusing the solutions recommendedin our reportwe could potentially add billions o


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dollars more revenue and hundreds o thousandsmore jobs to these already impressive totals.

Needless to say, the advances in unconventionaloil and gas have a number o other positive ollow-on effects, including a reduced trade deficit, the

ability to trade with riendlier countries, and greatereconomic stability.

Growth in the manuacturing sector has beengreatly aided by low-cost natural gas broughtinto the market through hydraulic racturingtechnology. In addition to the oil and natural gassectors, industries such as chemicals, ertilizer, ironand steel production, and general manuacturingall benefit rom the racking revolution. Chemicalmanuacturing alone represents 12% o U.S.

exports, and is the second largest exporting sectorin the U.S., with $189 billion o exports in 2013.114Americas competitive position in this field ishugely impacted by the availability o low-costenergy.

However, to ully take advantage o this energyrevolution, we must substantially increaseour pipeline, refinery, and other midstreaminrastructure, allowing affordable energy to getwhere people can use it.115 In a world in whichthe ederal government reuses to approve even

something as obviously beneficial as the KeystoneXL pipeline, more Washington obstruction meansthat many o these enormous potential benefits

may never be realized.

Te U.S. has a potentially durable comparativeadvantage in the development o inexpensivenatural gas, both due to our property rightsprotection that encourages drilling or natural

gas, and the technological prowess o our world-leading oil and gas companies. Te shale gas andtight oil revolutions provide a lesson or energymore broadlystrong property rights protectioncombined with leading technology can result indramatic production gains.

Creating high-quality, well-paying manuacturingand petrochemical jobs also requires a well-educated workorce equipped to compete in theglobal economy. Many manuacturers cannot

find enough well-qualified, skilled workers to fillempty positionsa dearth o talent that impedesgrowth or these companies and the economyas a whole. Neglected by some policy-makersor ar too long, greater promotion o vocationaleducation throughout our education system willprovide young Americans with more educationalchoices. In Louisiana a new $40 million highereducation Workorce and Innovation or a StrongerEconomy (WISE) und will aid in workorce training,and comes on the heels o legislative initiatives toexpand community and technical college capacity, so

that more students can receive the training they needto qualiy or well-paying jobs.117Expanding theseefforts nationwide will enhance workers economic

Figure 7: Employment Growth from Unconventional Oil and Gas113


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Figure 8: Announced Manufacturing Projects in the U.S. Related to Shale Gas Availability 116

opportunities, while making manuacturers morecompetitive, sparking aster growth.

Some o the best opportunities to promote skillstraining can come rom partnerships with businessesthemselves, which are looking to improve the qualityo the labor orce they can attract and retain. TeLouisiana WISE und requires higher educationinstitutions receiving grants to partner with privateindustry; allowing employers to participate in thecurricular development process will ensure thatstudents in these programs will have relevant skillsand bright job prospectsupon their graduation.

Companies like Phillips 66 are also providing avaluable service by working to re-train veteransreturning into civilian lie, taking the skills developedduring years o military training and utilizing thosetalents in well-paying refining, engineering, and othercareers.118

Recommendations:

Enact federal legislation to require more transparent rules, use o sound scientific

data, and use o a better review process to

ensure a balanced and effective regulationprocess that increases certainty andpredictability or the ederal regulatoryreview process.

Streamline and improve coordination

o ederal agency administration othe regulatory review, environmental

decision-making, and permitting processor major construction activities (related

to new or modified manuacturingacilities, inrastructure needs, etc.)reviewed by ederal agencies.

Encourage the return of vocational andtechnical education at the high school andpost-secondary levels, so that those whowill be entering the workorce cantake advantage o the jobs resulting romthe manuacturing renaissance.

Implement policies that incorporateindustry recruitment and potentialtraining into the United States militarysransition Assistance Program (AP), to

ensure that our veterans are able to returnhome and have the good paying jobs thatthey deserve.


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U.S. energy policy today is a tangled regulatorymess. Most o what Washington does todaystrangles the growth o affordable, reliable energy.echnological changes have transormed theworld o energy in recent decadesbut Americanpolicy remains stuck in the past, unable to adapt toadvances in the energy sector.

Under President Obama, the Department o Interiorseems more interested in shutting down domesticenergy production under a tidal wave o regulationthan it does in growing it. Meanwhile, the EPA andan activist Supreme Court continue to overreach,invading the policy-making tur that Co

Documents

America Next Energy Plan - Organizing Around Abundance